Question 1

Only manufacturing companies have finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 2

An inventoriable cost could be the cost of the marketing and distribution of a product.

Accepted Answer

A) True 
 B)False

Question 3

Cost of goods sold is a major expense of service companies.

Accepted Answer

A) True 
 B)False

Question 4

All companies have the same types of inventories.

Accepted Answer

A) True 
 B)False

Question 5

Porches,Inc.sells lawn furniture.Selected financial information for the most recent year is as follows:
Beginning merchandise inventory on January 1 was $33,000.
Ending merchandise inventory on December 31 was $35,000.
Purchases during the year were $92,000.
Selling and administrative expenses were $75,000.
Sales for year were $262,000.
What was operating income for the year?

Accepted Answer

A) $90,000 
B) $97,000 
C) $95,000 
D) $93,000 
A) $90,000 
B) $97,000 
C) $95,000 
D) $93,000

Question 6

The value chain concept helps companies control costs over the value chain as a whole.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of overhead expense in a factory?

Accepted Answer

A) Wages of machine operators 
B) Wages of administrators in the corporate office 
C) Wages of factory maintenance personnel 
D) Salaries of salespersons 
A) Wages of machine operators 
B) Wages of administrators in the corporate office 
C) Wages of factory maintenance personnel 
D) Salaries of salespersons

Question 8

Label each item below as relevant or irrelevant in making a decision.

Accepted Answer

A.relevant
B.irrelev

Question 9

A company has monthly fixed costs of $112,500.The variable costs are $6.00 per unit.If the sales price of a unit is $19.00 and we sell 7,500 units,the company's total variable costs will be

Accepted Answer

A) $112,500. 
B) $45,000. 
C) $142,500. 
D) $97,500. 
A) $112,500. 
B) $45,000. 
C) $142,500. 
D) $97,500.

Question 10

Which of the following items could be an example of a cost object?

Accepted Answer

A) A manufacturing plant 
B) An international plant 
C) The accounting department 
D) All of the above are examples of potential cost objects. 
A) A manufacturing plant 
B) An international plant 
C) The accounting department 
D) All of the above are examples of potential cost objects.

Question 11

How do total variable costs behave?

Accepted Answer

A) They decrease as production decreases. 
B) They remain the same throughout production levels within the relevant range. 
C) They decrease as production increases. 
D) They increase as production decreases. 
A) They decrease as production decreases. 
B) They remain the same throughout production levels within the relevant range. 
C) They decrease as production increases. 
D) They increase as production decreases.

Question 12

The only difference in the balance sheets of various types of businesses (for example,manufacturing vs.service)is

Accepted Answer

A) current liabilities. 
B) current assets. 
C) investments. 
D) equity. 
A) current liabilities. 
B) current assets. 
C) investments. 
D) equity.

Question 13

Among other products,Nabisco makes Oreo cookies.Which type of company is Nabisco?

Accepted Answer

A) Service 
B) Manufacturer 
C) Retailer 
D) Wholesaler 
A) Service 
B) Manufacturer 
C) Retailer 
D) Wholesaler

Question 14

Inventoriable product costs consist of manufacturing overhead,direct labor and direct materials.

Accepted Answer

A) True 
 B)False

Question 15

Porches,Inc.sells lawn furniture to consumers in the marketplace.The managerial accountant reported the following financial information that reflects the 20XX data:  
Compute the operating income.

Accepted Answer

A) $712,000 
B) $127,000 
C) $170,000 
D) $90,000 
A) $712,000 
B) $127,000 
C) $170,000 
D) $90,000

Question 16

Which of the following is a characteristic of a service company?

Accepted Answer

A) Service companies make a product. 
B) Service companies have a single category of inventory. 
C) Service companies generally have no tangible products to sell. 
D) Service companies transform raw materials into finished goods. 
A) Service companies make a product. 
B) Service companies have a single category of inventory. 
C) Service companies generally have no tangible products to sell. 
D) Service companies transform raw materials into finished goods.

Question 17

Plowin' Supply plans to make 15,000 tractors at its plant.Fixed costs are $600,000 and variable costs are $200 per tractor.What is the average cost per tractor?

Accepted Answer

A) $200 
B) $75 
C) $240 
D) $40 
A) $200 
B) $75 
C) $240 
D) $40

Question 18

Which type of company typically produces its own inventory?

Accepted Answer

A) Manufacturer 
B) Service company 
C) Retailer 
D) Wholesaler 
A) Manufacturer 
B) Service company 
C) Retailer 
D) Wholesaler

Question 19

Joe's Bottling Company provided the following expense information for July:
 
What is the total cost for the design category of the value chain?

Accepted Answer

A) $244,000 
B) $186,000 
C) $179,000 
D) $123,000 
A) $244,000 
B) $186,000 
C) $179,000 
D) $123,000

Question 20

A company produces toy airplanes at a variable cost of $23 per toy.If 7,000 toys are produced at a total variable cost of $161,000,the total variable cost at 4,500 toys will be

Accepted Answer

A) $161,000. 
B) $23. 
C) $103,500. 
D) $264,500. 
A) $161,000. 
B) $23. 
C) $103,500. 
D) $264,500.

Only manufacturing companies have finished goods inventory.

An inventoriable cost could be the cost of the marketing and distribution of a product.

Cost of goods sold is a major expense of service companies.

All companies have the same types of inventories.

The value chain concept helps companies control costs over the value chain as a whole.

Which of the following is an example of overhead expense in a factory?

Label each item below as relevant or irrelevant in making a decision.

A company has monthly fixed costs of $112,500.The variable costs are $6.00 per unit.If the sales price of a unit is $19.00 and we sell 7,500 units,the company's total variable costs will be

Which of the following items could be an example of a cost object?

How do total variable costs behave?

The only difference in the balance sheets of various types of businesses (for example,manufacturing vs.service)is

Among other products,Nabisco makes Oreo cookies.Which type of company is Nabisco?

Inventoriable product costs consist of manufacturing overhead,direct labor and direct materials.

Porches,Inc.sells lawn furniture to consumers in the marketplace.The managerial accountant reported the following financial information that reflects the 20XX data: Compute the operating income.

Which of the following is a characteristic of a service company?

Plowin' Supply plans to make 15,000 tractors at its plant.Fixed costs are $600,000 and variable costs are $200 per tractor.What is the average cost per tractor?

Which type of company typically produces its own inventory?

Joe's Bottling Company provided the following expense information for July: What is the total cost for the design category of the value chain?

A company produces toy airplanes at a variable cost of $23 per toy.If 7,000 toys are produced at a total variable cost of $161,000,the total variable cost at 4,500 toys will be

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 2: Building Blocks of Managerial Accounting

Only manufacturing companies have finished goods inventory.

An inventoriable cost could be the cost of the marketing and distribution of a product.

Cost of goods sold is a major expense of service companies.

All companies have the same types of inventories.

The value chain concept helps companies control costs over the value chain as a whole.

Which of the following is an example of overhead expense in a factory?

Label each item below as relevant or irrelevant in making a decision.

A company has monthly fixed costs of $112,500.The variable costs are $6.00 per unit.If the sales price of a unit is $19.00 and we sell 7,500 units,the company's total variable costs will be

Which of the following items could be an example of a cost object?

How do total variable costs behave?

The only difference in the balance sheets of various types of businesses (for example,manufacturing vs.service)is

Among other products,Nabisco makes Oreo cookies.Which type of company is Nabisco?

Inventoriable product costs consist of manufacturing overhead,direct labor and direct materials.

Porches,Inc.sells lawn furniture to consumers in the marketplace.The managerial accountant reported the following financial information that reflects the 20XX data: Compute the operating income.

Which of the following is a characteristic of a service company?

Plowin' Supply plans to make 15,000 tractors at its plant.Fixed costs are $600,000 and variable costs are $200 per tractor.What is the average cost per tractor?

Which type of company typically produces its own inventory?

Joe's Bottling Company provided the following expense information for July: What is the total cost for the design category of the value chain?

A company produces toy airplanes at a variable cost of $23 per toy.If 7,000 toys are produced at a total variable cost of $161,000,the total variable cost at 4,500 toys will be

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters